<p>A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.</p>

<p>The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" /></p>

<p>The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.</p>

<p>According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.</p>

<p>Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.</p>

<p>"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" /></p>

<p>The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.</p>

<p>Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" /></p>

<p>Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.</p>

<p>Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.</p>

<p>They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.</p>


Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

<p>Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.</p>

<p>In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.</p>

<p>The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.</p>

<p>The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments</p>

<p>The site currently comprises three commercial properties.</p>

<p><img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" /></p>

<p>The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.</p>

<p>The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.</p>

<p><img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" /></p>

<p>A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.</p>

<p>Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.</p>

<p>Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.</p>


First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<p><a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.</p>

<p>The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.</p>

<p>[smartcode_project:default project_id=134974 project_image_fid=5427]</p>

<p>The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.</p>

<p>Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.</p>

<p>[smartcode_project:default project_id=134974 project_image_fid=5421]</p>

<p>The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.</p>

<p>Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.</p>

<p>With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.</p>

<p>[smartcode_project_cta:default project_id=134974]</p>


Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

<p>A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.</p>

<p><a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.</p>

<p>Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.</p>

<p>[smartcode_project:default project_id=152125 project_image_fid=363778]</p>

<p>The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.</p>

<p>Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.</p>

<p>Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.</p>

<p>The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.</p>

<p>[smartcode_project:default project_id=152125 project_image_fid=363782]</p>

<p>Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.</p>

<p>Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.</p>

<p>[smartcode_project_cta:default project_id=152125]</p>


Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<p><a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.</p>

<p>Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.</p>

<p>Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.</p>

<p>Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.</p>

<p>"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.</p>

<p>"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370898]</p>

<p>For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.</p>

<p>Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;</p>

<p>All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.</p>

<p>Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.</p>

<p>"It's a place to choose your pace and live gracefully, seaside'," Sander says.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370900]</p>

<p>The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;</p>

<p>Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.</p>

<p>"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;</p>

<p>"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370897]</p>

<p>Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;</p>

<p>Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.</p>

<p>The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;</p>

<p>"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;</p>

<p>Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370899]</p>

<p>Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.</p>

<p>Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.</p>

<p>[smartcode_project_cta:default project_id=150499]</p>


Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Labour Force

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<p><span>Australia's favoured share market index, the ASX 200 ("XJO"), continues to meander along, now miserably hovering below 5,500, having previously once again threatened 6,000.</span></p>
<p><span>It's a monster day ahead for news with the Labour Force figures out at 11.30am.</span></p>
<div id="post-body-5375889496668172470" class="post-body entry-content">
<div>After a somewhat downcast speech from Reserve Bank Governor Stevens yesterday, analysts will be awaiting these latest figures with bated breath.</div>
<div> </div>
<div>Before we move on to look at the employment figures in detail, a quick look at why the residential construction boom has plenty of gas left in its tank yet.</div>
<br><strong><span style="text-decoration: underline;">New home finance up</span></strong><br><div> </div>
<div>The <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0" target="_blank">Housing Finance</a> figures for April showed a moderate increase in the seasonally adjusted number of new dwelling commitments to 2,766 in the month.</div>
<div> </div>
<div>While this was an improvement on the March figure, smoothing the data on a 4mMA basis, shows that the trend looks to have passed its peak.</div>
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<div><img src="/images/2015/06/11/HF5.jpg" alt=""></div>
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<div>In terms of the value of loans written for new dwellings, the data recorded a record high of $1.03 billion in April, reflective of the expensive nature of new housing stock in Australia.</div>
<div> </div>
<div>Investors both domestically and from offshore pay a hefty premium to buy new, and this has taken rolling annual new dwellings finance its highest ever level at $11.6 billion.</div>
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<div><img src="/images/2015/06/11/HF1.jpg" alt=""></div>
<div> </div>
<div>
<div>Despite the trend in new dwelling commitments looking decidedly toppy, this overlooks that a sizeable percentage of new dwelling sales are made to foreign investors, particularly in Sydney, Melbourne, Brisbane, and elsewhere.</div>
<div> </div>
<div>Naturally enough, these offshore sales are not picked up in our domestic housing finance figures.</div>
<div> </div>
<div>Most other indicators, including record high building approvals and forecast dwelling starts, point towards an industry which is now at or approaching its full capacity.</div>
<div> </div>
<div>Typically skills and materials shortages at this stage in the construction cycle will lead to rapid inflation in the build cost of new dwellings, and there are already some indicators of this dynamic.</div>
<div> </div>
<div>In particular, the Reserve Bank's liaison work has noted a shortage of bricklayers and project managers in the residential space, despite the widespread availability of construction workers as the mining investment boom dies its long, slow death.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Construction loans</span></strong></div>
<div> </div>
<div>Unsurprisingly most buyers continue to seek finance to buy established property, although if you look closely, construction finance is rising steadily.</div>
<div> </div>
<div><img src="/images/2015/06/11/HF2.jpg" alt=""></div>
<div> </div>
<div>
<div>Drilling into this a little further, the rolling annual value of construction loans to owner occupiers appears to have peaked out at a record $22 billion.</div>
<div> </div>
<div>However, rolling 12 monthly construction finance commitments to investors continue to rise, now up to $9.1 billion of loans written, which is also a record high.</div>
<div> </div>
<div><img src="/images/2015/06/11/HF3.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Renovations</span></strong><br><div> </div>
<div>If there is one genuine bubble in the Australian economy, it is surely in the irrationally exuberant number of renovation TV shows advertised on the television (I've never actually watched one, I should disclose...not my thing).</div>
<div> </div>
<div>Alas, outside Sydney, where renovations activity is both robust and rising, nobody seems to be undertaking any renovation projects themselves! </div>
<div> </div>
<div>Sure this was only the first month of the quarter, but the contribution to GDP growth from major alterations and additions in the second quarter of the year already looks likely like to be nil.</div>
<div> </div>
<div><img src="/images/2015/06/11/HF6.jpg" alt=""></div>
</div>
</div>
<div> </div>
<div>
<br><span>Meh.</span><br><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>Some survey indices have lately pointed to a contraction in apartment and attached dwelling construction.</div>
<div> </div>
<div>These indices are surely broken!</div>
<div> </div>
<div>Just a few days wandering around the capital cities and major regional centres would tell you as much.</div>
<div> </div>
<div>The residential construction boom continues, fuelled largely by sales to offshore buyers, and for this reason, the data on new dwelling commitments domestically doesn't give us the full picture.</div>
<div> </div>
<div>The construction loans data charted above - combined with record high building approvals and a strapping number of dwelling starts - imply that the next two years will see a sustained high level of activity in home building.</div>
<div> </div>
<div>
<em><span>PETE WARGENT</span> is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br><p><em>His book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.</em></p>
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pwargent-M4siyDbqQY

Residential construction boom to continue: Pete Wargent

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<div>The ABS released its Detailed Labour Force figures for October 2015 which provided further detail on the extraordinary rate of job gains in New South Wales, where employment has grown at an electric pace over the past year. </div>
<div> </div>
<div>Sydney recorded another strong month of gains and has created +85,000 positions over the year to October. Interestingly after a fairly dismal four years, the rest of the state has also created +51,000 new roles. </div>
<div> </div>
<div>Of Australia's other major labour markets Melbourne (+78,000) and lately the improving Greater Brisbane region (+43,000) have accounted for the bulk of new positions.</div>
<div> </div>
<div><a href="/images/2015/11/20/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/20/A1.jpg" alt=""></div>
<div> </div>
<div>
<div>By contrast over the past five years since October 2010 total employment in Adelaide has declined by 5,500.</div>
<br><strong><span style="text-decoration: underline;">Unemployment divergence</span></strong><br><br><div>Looking at capital city unemployment rates on a rolling annual basis shows that while unemployment rates are rising in Perth and Adelaide, elsewhere they have been declining.</div>
<div> </div>
<div><a href="/images/2015/11/20/A2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/20/A2.jpg" alt=""></div>
<div> </div>
<div>
<div>Sydney has been the king of employment gains in recent times, and as such recorded an unemployment rate for October of just 4.7 per cent across the Greater Sydney region.</div>
<div> </div>
<div>Over the past year some of the consistently lowest unemployment rates in Australia have been seen in Sydney's Northern Beaches (2.5 per cent), Eastern Suburbs (3.2 per cent), North Sydney &amp; Hornsby (3.7 per cent) and Inner West (4.3 per cent).</div>
<div> </div>
<div><a href="/images/2015/11/20/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/20/A3.jpg" alt=""></div>
<div> </div>
<div><span>At the other end of the scale the unemployment rate in Adelaide continues to trend up to well above 7 per cent, with further jobs losses subsequently reported in the month of November in the struggling state of South Australia.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/11/20/A4.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/11/20/A4.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>After a lift in unemployment as the resources capital expenditure boom passed its peak, Greater Brisbane has seen a pleasing improvement in its local economy.</div>
<div> </div>
<div>Employment gains have picked up to a solid pace and the rolling annual unemployment rate has trended down from 6.3 per cent to 5.9 per cent through this calendar year to date.</div>
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<strong><span style="text-decoration: underline;">Mining regions suffer</span></strong><br><em><br></em><em>Commsec</em> put out a usueful reseach note which reported that mining regions - and coal mining regions in particular - have suffered, with jobless rates in the Hunter Valley and Mackay having broadly doubled.<br><br>This in itself comes as no great surprise - I predicted as much here on this blog 14 months ago.<br><br>Other regions with elevated levels of unemployment have included Wide Bay, Logan-Beaudesert, Adelaide North, Townsville, and Cairns.<br><br>The news for regional Australia is far from all bad, however.</div>
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<br>While there is no doubt that many parts of regional Queensland are doing it very tough, there have been improvements in unemployment rates in the Wide Bay region, the Hunter Valley, Newcastle &amp; Lake Macquarie, and Geelong (and possibly several other regions, subject to the vagaries of sampling variability).<br><br>Indeed, after some ugly results early in the year the figures reported for regional unemployment have generally improved of late, so perhaps some of the mining fallout is now in the rear view mirror, as contractors migrate back to their respective capital cities.<br><br>That said, total regional employment growth outside New South Wales (and to some extent Queensland) has been weak, while new roles may also be lower paid than those which they replaced.</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Mining regions struggle: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>As expected, the Reserve Bank Board decided to keep the cash rate unchanged at 0.75%.</p>
<p>It is noteworthy that the Board has also not adjusted its growth forecasts for 2020 and 2021 holding them at 2.75% and 3% respectively. The discussion around the two recent shocks to growth – bushfires and coronavirus – emphasises the likely temporary impact of both although the statement does appropriately point out that “it is too early to determine how long lasting the impact [of the coronavirus] will be”.</p>
<p>Further emphasising this tentative approach to coronavirus developments, the description around the world economy has changed: “global growth is expected to be a little stronger this year and next than it was last year.” That compares to the December statement which only referred to: “the outlook for the global economy remains reasonable” – a surprising modest lift in confidence around the world economy given the current recent market developments.</p>
<p>On the other hand the fall in the unemployment rate since the last Board meeting, from 5.3% to 5.1% has been taken on board and the new forecast for the unemployment rate in 2020 appears to be 5.1% down from 5.25% at the December Board meeting. For 2021 the expectation that the unemployment rate will fall slightly below 5% is maintained.</p>
<p>It is of some interest that the statement does not repeat the description “gentle turning point” although the arguments pointing to an improving growth outlook – the low level of interest rates; tax refunds; ongoing spending on infrastructure; a brighter outlook for resources – is now supplemented by a more confident outlook for the residential construction cycle where the statement points to an expected recovery later this year.</p>
<p>It is important that the sentiment in the December statement that “the Australian economy can sustain lower rates of unemployment and underemployment” has been repeated. This emphasises the desirability, from the Board’s perspective, of further falls in the unemployment rate.</p>
<p>The recent weakness in the Australian dollar is recognised with the AUD being described as “around its lowest level over recent times”. That compares with the previous description of “at the lower end of its range in recent times”. There may be some inconsistency in this observation given that if, as the growth forecasts imply, the economy bounces back from the short term shocks, a recovery in the AUD is almost certainly going to be an outcome.</p>
<p>In the final paragraph, the statement repeats the sentiment of the December statement emphasising: 1) the long and variable lags in the transmission of monetary policy; and 2) the Board is prepared to ease policy further if needed. The third point used in December, that “[the Board] continues to monitor developments, including in the labour market” has been modified to “The Board will continue to monitor developments carefully, including in the labour market”. Arguably this final difference can be interpreted as the Board being more uncertain about future developments and therefore wanting to emphasise its strong duty of care.</p>
<p><strong>Conclusion</strong></p>
<p>We have been surprised that the Board has retained its growth forecast for 2020 at 2.75% (around trend) given the weaker momentum which was apparent from the September quarter national accounts and developing questions around the global economy. It is also somewhat brave, given a range of leading indicators around the labour market, to assume that the recent surprise fall in the unemployment rate over the last two months, from 5.3% to 5.1%, will be sustained. Westpac’s forecast is for the unemployment rate to drift upwards over the first half of 2020.</p>
<p>The uncertainty around the coronavirus poses substantial risks to economic forecasts but certainly the impact of the virus over the course of the first quarter both globally and domestically has to be quite damaging. It seems unlikely that subsequent stimulus policies will be able to fully offset the short term damage done to confidence and activity implying a realistic downward revision to growth forecasts, both globally and domestically.</p>
<p>Westpac continues to expect that a combination of a more moderate growth outlook and an unexpected (by the RBA) deterioration in the labour market will require a further policy response. Our forecast is that the next rate cut will occur in April followed by a further cut in August.</p>
<p><strong>BILL EVANS </strong><em>is the Chief Economist at Westpac</em></p>
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RBA remain optimistic but cash rate cuts ahead

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<p>EXPERT OBSERVER</p>
<p>The July Labour Force Survey was a robust update on employment (+41.1k) but with participation hitting a new record high at the same time, unemployment remained sticky at 5.2%. Given this strength in participation, even if employment growth continued to outperform expectations from here, it is hard to see unemployment getting down to 5% any time soon, let alone getting down to the RBA’s natural rate of 4.5%.</p>
<p>This matters for wages, even more so given that the underemployment rate (those who are working who desire and are able to work more hours) didn’t improve as much as unemployment did through 2018. Underemployment was trending higher earlier this year compared to unemployment until the surprise drop in June. But in July, underemployment bumped higher to 8.4%, still better than 8.6% in May but this lift did lock in a trend drift higher.</p>
<p>Given rising participation and rising underemployment, we were not surprised to see another soft wages update from the June quarter Wage Price Index (WPI). In the June quarter the WPI lifted 0.6% vs market expectations for a 0.5% rise and up slightly from the 0.5% rise in the March quarter. This held the annual rate flat at 2.3%yr which is a modest lift from the low of 1.9% in 2017 but can hardly be described as a breakneck pace.</p>
<p>The June quarter wage print was 0.61% at two decimal places with a 0.54% rise in private sector wage rates and a very solid 0.82% rise in public sector wages, the largest quarterly rise in public sector wages since Q1 2014. But this followed the smallest quarterly rise in public sector wages since March 2000 of 0.45% in the March quarter, highlighting greater than normal volatility in this series.</p>
<p>The ABS noted that in the June survey, the most significant contribution to wage growth in the public sector component came from health care and social assistance, with Victoria reporting a number of large increases as employees there had their pay adjusted to ensure wage parity with other states.</p>
<p>Victorian public sector wages grew 1.5%, there was a more average rise in Queensland of 0.5% while NSW reported a below average increase of 0.2%. In the year to June, public sector wages have been growing at 2.6%yr.</p>
<p>Contrast the lift in public wages against the flattening pace in private sector wages. Private sector wages printed a rise of 0.54% in each of the last two quarters seeing the annual pace ease back to 2.3%yr from 2.4%yr in March which was the fastest pace since December 2014.</p>
<p>Overall, we have to admit the pace of growth in private sector wages has been very disappointing. We have found that private sector wages have a good relationship with underutilisation (unemployment plus underutilisation) with a lag of around two quarters.</p>
<p>Which then leads to an ongoing conundrum: why are wages growing so slowly in NSW, the state that previously had underutilsation that was well below the national average (thus the tightest labour market) since the second half of 2015?</p>
<p>Contrast this with WA, the state that has had the highest rate of underutilisation and is now experiencing well below average wage outcomes. Yet wages in the state of Victoria have been more responsive to changes in labour market conditions.</p>
<p>The recent modest acceleration in the pace of wages growth in Victoria to 2.9% maps nicely against the decline in underutilisation from late 2016 to early 2018. Since the second half of 2018 underutilisation has started to drift higher again suggesting the acceleration in wage inflation should moderate in Victoria (excluding any effect from public sector wage equalisation) as we move through 2019.</p>
<p>It is a puzzle as to why NSW wages have underperformed the tightness in labour market conditions, so we can't be confident how far labour market tightness in Victoria will lift wages. We also have to take care when considering how much of the Victorian pressure on wages will be passed onto other states.</p>
<p><em>Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/August/er20190819BullLabourForce.pdf" target="_blank">'Australian July Labour Force' (PDF 179kb)</a></em></p>
<p><em><strong>JUSTIN SMIRK</strong> is ‎a senior economist for Westpac </em></p>
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Employment remains robust but unemployment and wages are unmoved: Justin Smirk

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<p><strong>EXPERT OBSERVATION</strong></p>
<p>A robust update but participation hit a new record high at the same time. So while the employment growth continues to outperform expectations the unemployment rate is very sticky around 5.2%.  As such, it is hard to see unemployment getting below 5% any time soon, let alone getting down the RBA’s natural rate of 4.5%.</p>
<p>Westpac is forecasting the unemployment rate to rise from here on the back of a soft patch in employment.</p>
<p>In the past year the largest share of employment gains have been for full-time females, male full-time employment has grown slower than total employment, suggesting employment gains remain focused in the services industries that are rich in female employment.</p>
<p>This update gives us comfort that the RBA will opt to wait-and-see at the September Board meeting and leave the cash rate unchanged.</p>
<p>The July Labour Force Survey reported a 41.1k gain in employment. As we head into the second half of the year, employment remains quite robust with a three month average gain of 28k in July, unchanged from June and slightly down from 35k in May.</p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%201.jpg" target="_blank">Click here</a> to enlarge: </p>
<p> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%201.jpg" alt=""></p>
<p><span>The May survey reported a strong +45.2k gain in employment with participation surging to a new record high of 66.1%, boosting the labour force and therefore holding unemployment flat at 5.2% despite the strong gain in employment. </span></p>
<p><span>Since then, while the month to month employment gains have been volatile, the trend remains robust and unemployment has been flat at 5.2%.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%202.jpg" target="_blank">Click here</a> to enlarge: </p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%202.jpg" alt=""> </span></p>
<p><span><span>In the year to July, employment has grown 333k or 2.6%. The pace of employment growth has eased back from 2.9%yr in May but it is still stronger than the 2.2%yr at the end of 2018, while the six month annualised pace has was flat at 2.4%yr. </span></span></p>
<p><span><span>Our Jobs Index suggests employment should be growing around 2.4%yr currently before slowing to 2.1%yr through Q4.</span></span></p>
<p><span><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%203.jpg" target="_blank">Click here </a>to enlarge: </span></p>
<p> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%203.jpg" alt=""></p>
<p>We think it is worth noting that June employment was revised to –2.3k from +0.5k with June now recording the first negative print on employment in three years. </p>
<p>In July, unemployment was flat at 5.2% (5.23% at two decimal places - it was 5.24% in June) with participation rising to a new record high of 66.1% (66.06% at two decimal places from 65.96% in June) the labour force grew a very solid 41.9k.</p>
<p>We had expected that a soft employment print would have been associated with a moderation in participation so we are not surprised that a robust employment gain is matched by a lift in participation.</p>
<p>Today’s update is further confirmation of a robust upward trend in participation, but there was a shift on which state is in the driving seat.</p>
<p>NSW hit a record high of participation of 66.2% in May and has since eased back a bit as has Victoria, which leaves Qld supporting the more recent gains in participation.</p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%204.jpg" target="_blank">Click here </a>to enlarge:</p>
<p> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%204.jpg" alt=""></p>
<p><span>In June we were surprised by the drop in underemployment (those employed who are willing and able to work more hours) which fell 0.4ppts to 8.2%. </span></p>
<p><span>Underemployment did not improve as much as unemployment through 2018 and had recently been trending higher compared to the unemployment rate. But in July, underemployment bumped back up to 8.4%, still down on the 8.6% in May but it did help to lock in a stronger trend.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%205.jpg" target="_blank">Click here</a> to enlarge: </p>
<p><span> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%205.jpg" alt=""></span></p>
<p>Underemployment lifted in both NSW and Victoria (from 7.5% to 7.9% and 7.9% to 8.5% respectively) while it fell in Queensland and WA (from 8.6% to 8.5% and 9.6% to 9.4% respectively).</p>
<p>We note how high underemployment is in Victoria compared to unemployment — unemployment is well below the national average (4.8% vs. 5.2% nationally) whereas the underemployment rate of 8.5% is higher than the national average of 8.2%.</p>
<p>In the last year to July, the gains in employment have mostly been full-time (255.6k/3.0%yr) and with females gaining slightly more than males (153.8k/4.9%yr for females, 101.8k/1.9%yr for males).</p>
<p>The mix is interesting as female full-time employment has lifted 153.8k (4.9%yr) in the year while male fulltime rose 101.8k (1.9%yr).</p>
<p>In contrast male part-time employment has lifted 59.2k in the year (4.8%) while female part-time grew just 17.8k (0.6%yr).</p>
<p>It does appear that employment gains continued to be focused in the services sectors that are rich in female full-time employment positions.  </p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%206.jpg" target="_blank">Click here </a>to enlarge: </p>
<p> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%206.jpg" alt=""></p>
<p>Employment growth has held together and has been quite robust so far in 2019 with the July update suggesting the pace of growth may be picking up — somewhat unexpectedly given the softening leading indicators.</p>
<p>Unemployment is flat around 5.2% but underemployment is drifting higher as the employment to population ratio has held around 62.5% to 62.6% since April highlighting that the gains in employment have only been pacing the gains in working age population.</p>
<p>In the year to July, employment has grown 161.4/4.0%yr in NSW compared to 97.8k/3.0%yr gain in Victoria. Employment grew more modestly in Queensland (57.8k/2.3%yr) and just 6.9k/0.8%yr in SA and slight better in WA with 19.5k/1.5%yr in WA.</p>
<p><a href="https://www.propertyobserver.com.au/images/2019/8/15/westpac%207.jpg" target="_blank">Click here </a>to enlarge: </p>
<p> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/15/westpac%207.jpg" alt=""></p>
<p>Since December the unemployment rate has risen 0.1ppt in NSW to 4.4% (the national low), +0.6ppt in Victoria to 4.8% with a smaller 0.3ppt in Queensland at 6.4% but a solid 0.9ppt lift in SA to 6.9%, the highest unemployment rate in Australia.</p>
<p>The only state to record a decline in unemployment from December is WA where it fell –0.4ppt to 5.9% which is still above the national average.</p>
<p>For complete chart pack <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/August/JulyLabour-FI_chart_pack.pdf" target="_blank"><strong>July Labour Force Chart Pack (pdf </strong><strong>334kb)</strong></a></p>
<p><em>JUSTIN SMIRK is ‎a senior economist for Westpac</em></p>
<p><span> </span></p>
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Labour force data will leave the RBA on the sidelines next month: Justin Smirk

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<p>EXPERT OBSERVATION </p>
<p>The minutes of the April monetary policy meeting of the Reserve Bank Board have provided the clearest signal yet that the Bank would be prepared to cut the cash rate.</p>
<p>Firstly, the final section “Considerations for Monetary Policy” states “a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and via reducing required interest payments on borrowing, freeing up cash for other expenditure”.</p>
<p>The Board even sets out the conditions for a rate cut, “members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances”.</p>
<p>Recently the latest quarterly breakdown of employment by industry printed for the year to February.</p>
<p>We have considered this industry breakdown to try to find some insights into the RBA’s “tension” between the GDP and Employment Reports.</p>
<p>For a start it is reasonable to separate out the employment data into “cyclical” and “non-cyclical” sectors.</p>
<p>We have looked at “non-cyclical” covering: public administration; education and training; health care; and utilities.</p>
<p>Cyclical sectors are considered to be the other thirteen including: construction; manufacturing; retail and wholesale trade; accommodation; transport; finance; mining; real estate; recreation; and media.</p>
<p>The “non-cyclical “group has increased as a proportion of total employment from 27.9% in February 2008 to 31.9% in February 2019. That 4% increase in share represents 510,000 jobs in today’s workforce.</p>
<p>The cyclical group has fallen as a proportion of the workforce from 64.6% in February 2008 to 59.4% in February 2019.</p>
<p>It is important to note that “public administration” has increased by 18% over the last year but we assess that a considerable part of that increase has been due to reclassification of health and education workers from “private” to “public”.</p>
<p>Because we are including public; education; and health in the noncyclical category the reclassification does not distort the results.</p>
<p>Finally we have one remaining category – “professional services”.</p>
<p>This group represents 8.7% of total employment covering: management consulting; computer system design; accounting services; legal services; and engineers.</p>
<p>This category represents 8.7% of total employment having increased from 7.4% in February 2008.</p>
<p>Consider Table 1 to assess whether there has been any evidence of the impact of the slowdown in growth in the economy on employment.</p>
<p>The table uses the six month annualised growth rate for jobs in the three categories (using a two quarter average to smooth the series).</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/19/New%20Project%207.jpg" alt=""></p>
<p>The following observations are relevant:</p>
<ul>
<li>As noted by the RBA, overall momentum in the jobs market has held fairly steady over the last 18 months despite the slowdown in economic growth (2.6% in the six months to February 2018 to 2.2% in the last six months).</li>
<li>However, momentum in the “cyclical” sectors has slowed markedly from 2.9% in the six months to February 2018 to –0.4% in the six months to February 2019.</li>
<li>Momentum in the “non-cyclical” sectors has lifted considerably from 1.5% to 5.6% over the same period.</li>
<li>The professional services sector has been booming. So the “puzzle” about the labour market is not as opaque as might be expected.</li>
</ul>
<p>Non-cyclical jobs (dominated by government) have been strong and this sector is increasing as a proportion of total employment.</p>
<p>Cyclical sectors are slowing markedly and are falling as a proportion of total employment.</p>
<p>Given the lags and the cautious outlook for growth, employment in these sectors is likely to continue to slow.</p>
<p>It is not clear whether the “professional services” sector best fits in the cyclical or the non-cyclical categories.</p>
<p>Certainly, strong government spending in the infrastructure space is likely to explain a considerable part of the success of this category; the sharp lift in government regulations is also supporting this sector.</p>
<p>Furthermore, there is also likely to be a structural element to the success of this sector as companies embrace technology to boost productivity and substitute labour.</p>
<p><strong>Conclusion</strong></p>
<p>The Board of the RBA has nominated the labour market as the key for the policy outlook.</p>
<p>We are disappointed that ongoing low inflation and the persistent need to lower growth forecasts seems to be out-weighed by the employment “story”.</p>
<p>Our analysis points to a marked slowdown in jobs growth already being well underway in the cyclical sectors of the economy.</p>
<p>We expect that eventual recognition of these facts will keep the RBA on track for our expected first rate cut in August.</p>
<p><em><strong>Bill Evans</strong> is Chief Economist at Westpac.</em></p>
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Cyclical jobs are slowing, complicating the RBA’s employment puzzle: Bill Evans

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<p>GUEST OBSERVER</p>
<p>The February Labour Force Survey was a disappointing update on the Australian labour market reporting a fall in total employment along with unemployment rising to its highest level in 15 months.</p>
<p>So far in 2017 the labour market has been quite a bit softer than we had anticipated.</p>
<p>In February total employment declined 6.4k and the annual was flat at 0.9 percent/yr holding well under the pace that our Jobs Index suggests it should be – circa 1¾ percent/yr and accelerating to around 2¼ percent/yr by late 2017.</p>
<p>The ABS notes that in the February survey sample rotation may explain some of the weakness in the month. In March if the sample rolling in is more like the average  of the total sample then this would result a bit of a positive bump. But sample volatility does not explain the weakness seen over the last three months.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/13/Screen%20Shot%202017-04-13%20at%208.33.47%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/04/13/Screen%20Shot%202017-04-13%20at%208.33.47%20AM.png" alt=""></p>
<p>Our 20k forecast for March holds the annual pace at 0.9 percent/yr but we note that changing seasonality increases the risk to this forecast.</p>
<p>In February, the rise in full-time employment was not a positive sign as it did not broken the recent trend for a greater focus on part-time employment. In addition the weakening in hours worked further emphasised that labour demand is somewhat weaker than what the business surveys suggest.</p>
<p>The –6.4k decline in employment in February was reported with a 19.5k jump in the labour force due to a flat participation rate of 64.6. This is why the unemployment rate jumped 0.2ppt to 5.9 percent (5.87 percent unrounded).</p>
<p>In March, if participation holds steady, a 20k gain in employment will be enough to hold unemployment rate steady at 5.9 percent.</p>
<p>Weak hours worked in late 2015 were something of an early warning of the soft patch in employment. In January we had found it very promising that hours worked per employee lifted 0.8 percent in the two months to Jan. Since then hours worked have pulled back so we are again closely watching to see if this is presaging a further slowdown in employment.</p>
<p>We also note a small lift in employees who expect to lose their job due to their employer closing. This series can lead changes in the unemployment rate. </p>
<p><em>Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.</em></p>
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Looking for signs of stability in the labour market: Westpac's Justin Smirk

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<p><img src="https://counter.theconversation.edu.au/content/68802/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Over the last few years, we’ve seen a massive shift in the way we work.</p>
<p>Thousands of Australians have abandoned the traditional 40-hour work week to work fewer hours or take on ad-hoc work, such as driving for Uber or doing odd jobs on Airtasker. </p>
<p>But the way we measure the labour market has not kept up. We still rely on the Australian Bureau of Statistics’ labour force survey, a survey from the 1960s conducted according to international conventions that is no longer appropriate for today’s labour market.</p>
<p>Today’s economy – one of independent contractors, ad-hoc work, irregular and flexible hours – needs a new form of measurement. </p>
<h2>How the government measures the workforce</h2>
<p>Every month the Australian Bureau of Statistics (ABS) surveys about 0.32% of the civilian population aged over 15 years about their employment status.</p>
<p>In short, you’re counted as employed if you completed at least one hour of paid work in the week before the survey.</p>
<p>But this doesn’t sound quite right. Clearly, one hour of paid work per week doesn’t fit most people’s idea of employment.</p>
<p>In fact, over one million workers are counted as “underemployed”, meaning they would work more hours if they could. This raises the question of whether these people should really be considered “employed”. The answer depends on what policy question you are trying to address.</p>
<h2>Is our unemployment rate right?</h2>
<p>Let’s get right into how our unemployment rate is calculated.</p>
<p>If respondents haven’t done any paid work in the last week, they are asked two further questions – first, have they actively sought work in the last four weeks, and second, are they currently available to start work? They are only considered unemployed if they answer yes to both of these questions. Otherwise, they’re not counted as part of the labour force. </p>
<p>This means full-time homemakers, carers, the ill and non-working retirees aren’t considered unemployed.</p>
<p>The labour force is the sum of the employed and the unemployed. The unemployment rate is the percentage of the labour force who are unemployed. </p>
<p>Lastly, the participation rate is the percentage of the population aged 15 and older who are in the labour force. According to the latest ABS trend estimates, the participation rate stood at 64.5% in November, no change from October.</p>
<p>The participation rate has been consistently trending upwards over time for women and falling for men. This does not mean women are increasingly doing more work but that over time they have switched from unpaid to paid work. One of the main reasons for falling participation among men is that unskilled manual jobs for older men have been declining over several decades and many men have been reclassified as unemployed, disabled or retired. </p>
<h2>More issues with the survey</h2>
<p>The Labour Force Survey only provides a measure of employment and not the number of jobs. For example, a person might work 20 hours per week at a supermarket and 10 hours per week as an Uber driver. Employment is always classified according to the “main job”, so the ABS deems them as one person employed part-time (working fewer than 35 hours) in the retail industry. </p>
<p>If that person worked five more hours as an Uber driver the next week, they would be classified as full-time (35 hours) but the supermarket job would still determine the industry in which they are employed.</p>
<p>The crucial problem here is that there are two jobs being done, but the ABS employment estimate only counts one. So be wary of commentators and politicians making statements like “the economy gained/lost 10,000 jobs last month”! What jobs are they measuring?</p>
<p>The labour force survey also fails to make distinctions between different types of workers. About two million Australians work as independent contractors like construction workers or other business operators such as hairdressers working from home. However, in the figures they are not distinguished from regular employees.</p>
<p>Whereas it might be relatively easy for an employee to know if they did any paid work in the week before the survey, it might not be so obvious for a non-employee. For instance, an author might work 50 hours on their book one week and three hours the next. Most of their work is basic research rather than writing. They receive a royalty payment twice a year. How would they answer the question of whether they did any paid work in the last week?</p>
<p>For non-employees the question of whether they are prepared to start work and have been actively looking for work can also be complex. Someone doing consultancy work might not actively look for work because clients seek them out instead.</p>
<h2>We need something new</h2>
<p>The ABS has tried tackling some of these issues by conducting some different surveys, including the Characteristics of Employment Surveywhich presents information on all employed persons according to their status of employment. However, the framework classifies jobholders by their main job. That is, only the job in which they usually worked the most hours. This doesn’t capture many of the issues of concern in, say, the “sharing” or “gig” economy </p>
<p>The ABS has also attempted to compare the number of filled jobs to the amount of employed people, using estimates in the labour force survey. This can reveal interesting information about the labour market. For instance, in February 2013 there were 11,628,300 employed people in Australia, but an estimated 12,287,200 filled jobs. That is, there were 658,900 more filled jobs than there were employed people. </p>
<p>But even then, the estimates still use the conventional definition of a job. </p>
<p>The ABS is still working on an Australian Labour Market Account, based on International Labor Organisation (ILO) methodology, which may address some of the issues discussed here. But this will still be based on traditional definitions of jobs, employment, and unemployment.</p>
<p>Our conventional employment measures are no longer equipped to inform us about important aspects of our labour force and a reliance on them could lead to inappropriate policy. We need labour force numbers than can capture the nuances of a modern economy.</p>
<p> </p>
<p><em><span class="fn author-name">Phil Lewis is p</span>rofessor of economics, University of Canberra and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/phil-lewis-8714" target="_blank">here</a>.</em></p>
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Finding new ways to measure the Australian labour force

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<p><img src="https://counter.theconversation.edu.au/content/68802/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Over the last few years, we’ve seen a massive shift in the way we work.</p>
<p>Thousands of Australians have abandoned the traditional 40-hour work week to work fewer hours or take on ad-hoc work, such as driving for Uber or doing odd jobs on Airtasker. </p>
<p>But the way we measure the labour market has not kept up. We still rely on the Australian Bureau of Statistics’ labour force survey, a survey from the 1960s conducted according to international conventions that is no longer appropriate for today’s labour market.</p>
<p>Today’s economy – one of independent contractors, ad-hoc work, irregular and flexible hours – needs a new form of measurement. </p>
<h2>How the government measures the workforce</h2>
<p>Every month the Australian Bureau of Statistics (ABS) surveys about 0.32% of the civilian population aged over 15 years about their employment status.</p>
<p>In short, you’re counted as employed if you completed at least one hour of paid work in the week before the survey.</p>
<p>But this doesn’t sound quite right. Clearly, one hour of paid work per week doesn’t fit most people’s idea of employment.</p>
<p>In fact, over one million workers are counted as “underemployed”, meaning they would work more hours if they could. This raises the question of whether these people should really be considered “employed”. The answer depends on what policy question you are trying to address.</p>
<h2>Is our unemployment rate right?</h2>
<p>Let’s get right into how our unemployment rate is calculated.</p>
<p>If respondents haven’t done any paid work in the last week, they are asked two further questions – first, have they actively sought work in the last four weeks, and second, are they currently available to start work? They are only considered unemployed if they answer yes to both of these questions. Otherwise, they’re not counted as part of the labour force. </p>
<p>This means full-time homemakers, carers, the ill and non-working retirees aren’t considered unemployed.</p>
<p>The labour force is the sum of the employed and the unemployed. The unemployment rate is the percentage of the labour force who are unemployed. </p>
<p>Lastly, the participation rate is the percentage of the population aged 15 and older who are in the labour force. According to the latest ABS trend estimates, the participation rate stood at 64.5% in November, no change from October.</p>
<p>The participation rate has been consistently trending upwards over time for women and falling for men. This does not mean women are increasingly doing more work but that over time they have switched from unpaid to paid work. One of the main reasons for falling participation among men is that unskilled manual jobs for older men have been declining over several decades and many men have been reclassified as unemployed, disabled or retired. </p>
<h2>More issues with the survey</h2>
<p>The Labour Force Survey only provides a measure of employment and not the number of jobs. For example, a person might work 20 hours per week at a supermarket and 10 hours per week as an Uber driver. Employment is always classified according to the “main job”, so the ABS deems them as one person employed part-time (working fewer than 35 hours) in the retail industry. </p>
<p>If that person worked five more hours as an Uber driver the next week, they would be classified as full-time (35 hours) but the supermarket job would still determine the industry in which they are employed.</p>
<p>The crucial problem here is that there are two jobs being done, but the ABS employment estimate only counts one. So be wary of commentators and politicians making statements like “the economy gained/lost 10,000 jobs last month”! What jobs are they measuring?</p>
<p>The labour force survey also fails to make distinctions between different types of workers. About two million Australians work as independent contractors like construction workers or other business operators such as hairdressers working from home. However, in the figures they are not distinguished from regular employees.</p>
<p>Whereas it might be relatively easy for an employee to know if they did any paid work in the week before the survey, it might not be so obvious for a non-employee. For instance, an author might work 50 hours on their book one week and three hours the next. Most of their work is basic research rather than writing. They receive a royalty payment twice a year. How would they answer the question of whether they did any paid work in the last week?</p>
<p>For non-employees the question of whether they are prepared to start work and have been actively looking for work can also be complex. Someone doing consultancy work might not actively look for work because clients seek them out instead.</p>
<h2>We need something new</h2>
<p>The ABS has tried tackling some of these issues by conducting some different surveys, including the Characteristics of Employment Surveywhich presents information on all employed persons according to their status of employment. However, the framework classifies jobholders by their main job. That is, only the job in which they usually worked the most hours. This doesn’t capture many of the issues of concern in, say, the “sharing” or “gig” economy </p>
<p>The ABS has also attempted to compare the number of filled jobs to the amount of employed people, using estimates in the labour force survey. This can reveal interesting information about the labour market. For instance, in February 2013 there were 11,628,300 employed people in Australia, but an estimated 12,287,200 filled jobs. That is, there were 658,900 more filled jobs than there were employed people. </p>
<p>But even then, the estimates still use the conventional definition of a job. </p>
<p>The ABS is still working on an Australian Labour Market Account, based on International Labor Organisation (ILO) methodology, which may address some of the issues discussed here. But this will still be based on traditional definitions of jobs, employment, and unemployment.</p>
<p>Our conventional employment measures are no longer equipped to inform us about important aspects of our labour force and a reliance on them could lead to inappropriate policy. We need labour force numbers than can capture the nuances of a modern economy.</p>
<p><em><span class="fn author-name">Phil Lewis is p</span>rofessor of economics, University of Canberra and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/phil-lewis-8714" target="_blank">here</a>.</em></p>
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mick.cee-iDmgDDAmu8

We need to find new ways to measure the Australian labour force

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<p>GUEST OBSERVER</p>
<p>Today's jobs numbers were weaker than expected, with broadly flat jobs in February (market had +14k).</p>
<p>However, at the same time, the unemployment rate outperformed by falling to 5.8 percent (market had 6.0 percent), due to an unexpected sharp decline in the participation rate. Measurement issues have pervaded this survey making it difficult to get a clear reading. This is the third consecutive month of weak jobs growth, but this partly reflects pay-back for very strong numbers late last year.</p>
<p>Cutting through the noise, the trend measures show the unemployment rate is still below its peak, suggesting gradual labour market improvement. However, unemployment is still well above its full employment level, which is likely to continue to weigh on wages growth and domestic inflation, leaving the RBA with scope to cut further.</p>
<p><a href="/images/2016/03/17/Screen%20Shot%202016-03-17%20at%202.58.35%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/17/Screen%20Shot%202016-03-17%20at%202.58.35%20PM.png" alt=""></p>
<p><br> <br>Facts<br> <br>Employment was broadly flat (up by just 300 jobs) in February (market expected +13.5k, HSBC expected +10k). Over the past six months, employment growth has averaged +20k a month. Annual employment growth has eased to 2.1 percent, down from a peak of 2.9 percent in November.<br> <br>The participation rate fell by 0.3ppts to 64.9 percent, the lowest rate since June 2015.<br> <br>Because of the drop in participation, the unemployment rate fell from 6.0 percent to 5.8 percent (the market and HSBC expected 6.0 percent).<br> <br>- The employment-to-population ratio fell from 61.2 percent to 61.1 percent, the lowest level since October 2015.<br> <br>Total hours worked fell by 0.1 percent m-o-m in seasonally-adjusted terms, and were up 2.2 percent y-o-y. Trend growth in hours worked slowed from 2.6 percent to 2.4 percent y-o-y.<br> <br>Implications<br> <br>Australia's official labour force survey is still suffering from measurement issues that make it complicated to interpret the results. Jobs were broadly flat in February, following falls in the previous two months, but this was after very strong growth in employment in October and November last year. A large part of the recent weakness appears to be 'payback' for the over-stated strength last year. However, it is not easy to separate the signal from the noise.<br> <br>One way to do this is to look at the trend measures within the official survey. These are showing gradual improvement in the labour market. The trend measure of the unemployment rate is at 5.8 percent, down from a peak of 6.3 percent in late 2014.</p>
<p>Another way to do this is to look at the collection of other indicators of the labour market, including job advertisements, job vacancies and hiring intentions in the business surveys. These are showing a more modest improvement in the labour market than is implied by the official numbers (see Figure 4 below).<br> <br>The other key issue is that although the range of indicators suggests that there has been a trend improvement in the labour market, the pick-up has not been enough to absorb sufficient spare capacity to put upward pressure on wages growth and domestic inflation.</p>
<p>Combine this with underlying inflation that is already at the bottom edge of the target band, weak global inflation and a climbing AUD, and it is likely that inflation will remain low. We expect underlying inflation to fall below the bottom edge of the RBA's 2-3 percent target band in H1 2016. Our central case has the RBA easing by a further 25bps around the middle of this year.</p>
<p><a href="/images/2016/03/17/Screen%20Shot%202016-03-17%20at%203.00.14%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/17/Screen%20Shot%202016-03-17%20at%203.00.14%20PM.png" alt="" width="1256" height="562"></p>
<p><em>Paul Bloxham is chief economist (ANZ) for HSBC . Daniel Smith is economist. They can be contacted <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">here</a>.</em></p>
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